Arabs 'lost $2.5 trillion in financial meltdown'
Kuwait, January 18, 2009
Arab nations have lost a whopping $2.5 trillion in four months because of the global financial meltdown, said a news report citing Kuwait’s foreign minister.
The crisis has led to 60 per cent of development projects in the Gulf region being put off or scrapped, Sheikh Mohammed Sabah Al-Salem Al-Sabah, also Kuwait’s acting oil minister, was quoted as saying in the Bloomberg.
“This just shows the huge damage caused by the crisis,” Sheikh Mohammed said on Saturday at a news conference during the Arab Economic Summit in Kuwait.
Oil has tumbled 75 percent from a July high, as the global economy sank into recession, straining budgets of crude exporters.
Saudi Arabia, Oman and Dubai, the second-largest sheikdom in the United Arab Emirates, say they’ll run deficits next year as low prices squeeze revenue.
“It’s not in the interests of the global economy for oil prices to collapse or have huge increases,” Sheikh Mohammed said. “There should be stability to oil prices.”
Gulf sovereign wealth funds have invested billions of dollars in financial institutions.
The Kuwait Investment Authority last January paid $3 billion for a stake in Citigroup Inc. and invested $2 billion in Merrill Lynch & Co. Abu Dhabi’s Investment Authority bought a 4.9 percent stake in Citigroup for $7.5 billion in November 2007.
Builders across the United Arab Emirates are struggling to finance developments and sell real estate after credit dried up and a five-year surge in property prices was halted.